Markus KleinMechanisms for the Effect of Field of Study on the Transition from Higher Education to Work

Several studies indicate a substantial impact of horizontal differentiations in higher education on monetary and non-pecuniary labour market outcomes. This paper scrutinizes the underlying mechanisms of this effect and addresses the question of why fields of study differ in early labour market re-turns. According to the training costs model the field of study indicates different amounts of training costs to employers. The higher the training costs, the more problematic the labour market integration of graduates. The average expected training costs of a study program are determined by the level of occupational specificity and the selective choice of the graduates. Specifically, 'soft fields' such as humanities or social sciences are considered as less occupational specific and less academically challenging. Besides, it is suggested that structural relations between fields and occupational characteristics act as mediators for the effect of field of study on labour market returns. Using the German HIS (Hochschul-Informations-System) Graduate Panel 1997 the results show that a lack of occupational specificity is partly responsible for difficulties in labour market entry of graduates from 'soft fields', whereas selectivity measures do not contribute to an explanation. By contrast, the type of final degree, the public sector and the required expertise of a job strongly mediate field of study differences. This emphasizes the substantial role of structural and institutionalized relations between education and the labour market.